I don't have a complex, model backed reply, but I can say that going from $7.50 an hour to something less would really screw me over as far as finances go. Stuff is expensive these days - I don't mean luxuries, but the essentials. Gasoline & car expenses, food, living maintenance, health care (many Americans have NO insurance), and that's not even looking into the fiat currency inflation eating up people's retirement savings. And while I see a lot of the points being made here, and they may indeed work in a perfect world, I also believe that many (employers) would end up taking advantage of it not to hire new employees at a lower price, but to fatten their own bottom lines by slashing wages under the banner "like it or leave it". There has to be some system to look out for the little guy, or you end up with a system like in China where you see people working for a pittance. Just my two cents...